Adapting to industry disruptions at the beginning of spring market
The spring market for residential real estate was just ramping up with home prices “rising robustly” prior to the COVID-19 pandemic. Home prices are still looking to hold steady as the housing industry adapts to the “new reality” to list and close deals. Business activity can be expected to be “markedly lower” this spring, according to the NAR Flash Survey: Economic Pulse. The survey was deployed on April 5 to a random sample of NAR members with a total of 5,855 responses and it provides an overview of national market conditions during this pandemic.
Here are some of the survey results that reflects the current spring market conditions during this pandemic.
National Business Activity – Residential
A majority of the REALTORS® indicated that buyer traffic has declined by more than 30 percent and a quarter of the REALTORS® indicated that seller traffic has declined by more than 30 percent. About 80 percent reported a decline in the number of homes on the market and nearly 60 percent have seen sellers remove their home from the market.
Delays in closings happened for several different reasons, with financing and appraisals most noted.
Many of the REALTORS® are hopeful that both buyers and sellers will return to the market as a “delayed transaction” after the pandemic.
National Home Prices – Residential
Home prices are looking to remain steady as home sellers are generally not lowering prices due to low inventory.
A majority of the REALTORS® have not seen home sellers lowering prices to attract buyers while only three percent of the REALTORS® indicated that they have seen home prices reduced by over 10 percent. Home buyers are more hopeful for price reductions given the current environment and their sense of less buyer competition.
The Northwest Multiple Listing Service (NWMLS) noted that housing activity around Western Washington* in March had higher volumes of new listings added, as well as pending and closed sales than in February. Despite the increases, NWMLS brokers emphasized that these numbers do not reflect the local real estate impact of the COVID-19 pandemic.
“We expect that all numbers will decline in April and May as a direct result of the governor’s “Stay Home” order that became effective on March 26,” stated Mike Grady, President and Chief Operating Officer at Coldwell Banker Bain. He also expects April and May will be “bridge months” before the market returns to a “more normal” activity level, “assuming we all abide by Governor Jay Inslee’s directives.”
*There are 23 counties in the NWMLS Primary Service area, the majority in Western Washington.
More information on the service area here: www.nwmls.com/about-us/page/who-we-are